Righting the Ship at McDermott

After a botched expansion into "subsea" waters, McDermott brought in a new CEO to right the ship. Why the shares could grow 20% or more in a year.

The last two years have been rocky for McDermott International, the engineering and construction firm that builds platforms for offshore drilling rigs and installs shallow-water oil-and-gas pipelines, as a shift in strategy proved ill fated and profits sank.

Traditionally a provider of construction services to oil and gas companies in shallow waters, McDermott began expanding its fleet capabilities five years ago and aggressively bid...